Under the Governor’s proposal, which requires legislative approval, the Department of Revenue (DOR) would be directed to offer a two-month corporate tax amnesty program before the current fiscal year ends on June 30th. Participating businesses would have the opportunity to pay their outstanding tax liabilities to the Commonwealth without having to pay any financial penalties. The Baker Administration estimates the tax amnesty will generate about $18 million in revenues.
“I’m pleased to see Governor Baker include this initiative as part of his plan to close the current budget deficit,” said Representative Jones. “Tax amnesties are a great way for the state to collect outstanding tax revenues that might otherwise have been foregone. Prior tax amnesties offered to individual taxpayers have proven to be highly successful, and there is no reason to believe that a corporate tax amnesty won’t be just as popular.”
The Governor’s corporate tax amnesty proposal mirrors a bill filed by Representative Jones in January, House Docket 2409. The tax amnesty program will be made available to businesses organized as corporations, Limited Liability Corporations, S-Corporations, Financial Institutions, and other corporate taxpayers.
Last year, DOR conducted a successful two-month tax amnesty program for individual taxpayers who owed state income tax after Representative Jones secured the necessary language through a budget amendment. A total of $57 million in outstanding taxes was collected from 61,000 individual filers during the most recent tax amnesty.
In 2010, a two-month tax amnesty program generated over $32.6 million in full and partial payments made by 8,495 eligible taxpayers, exceeding DOR’s projections of $20 million. A similar amnesty program in 2008 also netted over $30 million.
If approved by the Legislature, the corporate tax amnesty proposal would represent the first such program offered to businesses in Massachusetts in 12 years. Previous tax amnesties implemented in 2002 and 2003 brought in $91.6 million and $174 million, respectively.